Markets opened up by about 1.5% this morning, with Big Media crediting renewed optimism that Congress and the White House will finally agree on more stimulus.
That’s got nothing to do with it.
The Reality Gap here is that traders and investors are now focused on the election, and the uncertainty that it brings.
Now, it’s not really the uncertainty of who will win that’s got people worried. It’s when and how we’ll know who won that has traders wringing their hands.
Because of the pandemic, record numbers of voters will be voting through the mail rather than in person. That might delay the ballot count, a delay that President Trump has suggested he might ignore.
That’s led traders and investors to worry that we may wake up the day after the election with both camps claiming their candidates won.
But on Friday, investment Goldman Sachs Group Inc. (GS) published a note arguing that this uncertainty was already priced in. JPMorgan & Chase Co. (JPM) made a similar argument over the weekend.
Traders were convinced, and with a sigh of relief went back to trading.
Africa’s richest woman, several Russian oligarchs, a disgraced Kazakhstani banker, and a former Congolese warlord certainly make for a motley crew.
All have had run-ins with the law. Several are currently in hiding or in exile.
And this week, they’ve all made life even harder for the already battered big banks.
Because on Monday, leaked documents from the U.S. government’s Financial Crimes Enforcement Network revealed more than $2 trillion in suspicious transactions that big banks did nothing to stop.
We’re talking about money coming from money laundering, evading U.S. sanctions, fraud, and of course, corruption.
Even North Korea and Venezuela have been moving money using these banks. Often, the documents show that the banks themselves flagged the transactions as suspicious, but still let them through.
This has already pushed bank stocks lower. And we’re nowhere near the bottom for banks.
See, things are only going to get worse for them.
And that means you have an opportunity…